Blockchain for a frictionless insurance marketplace: An idea about to explode
Insurance has been around for centuries. While technology has permanently changed the way insurance business is conducted, the multi-trillion-dollar global insurance industry in many ways, is still stuck in the past. The inherent complexity of the value chain – ranging across consumers, brokers, insurers and reinsurers – made sure that a complete complexion change would always be difficult to achieve. Each step in this collaborative process represents a potential point of failure in the overall system, where information can be lost, policies misinterpreted, and settlement times lengthened. Blockchain attempts to break this complexity by enabling a seamless transaction across the insurance ecosystem.
When a digital transaction is carried out, it is grouped together in a cryptographically protected block with other transactions that have occurred, and sent out to an entire network. Based on their role, members in the network are able to verify the transaction. The validated block of transactions is then time-stamped and added to the chain in a linear, chronological order – that is indisputable. Since the contract is now digitally enabled, it can enable efficiency in the insurance value chain wherever time, effort or money is spent to confirm information before processing transactions.